[Federal Register Volume 75, Number 109 (Tuesday, June 8, 2010)]
[Notices]
[Pages 32376-32378]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-13759]
[[Page 32376]]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-912]
Certain New Pneumatic Off-the-Road Tires from the People's
Republic of China: Preliminary Results of Changed Circumstances Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: On November 10, 2009, the Department of Commerce (``the
Department'') published in the Federal Register a notice of initiation
of a changed circumstances review of the antidumping duty order on
certain new pneumatic off-the-road (``OTR'') tires from the People's
Republic of China (``PRC'') in order to determine whether Mai Shandong
Radial Tyre Co., Ltd. (``Mai Shandong'') is the successor-in-interest
to Shandong Jinyu Tyre Co., Ltd. (``Shandong Jinyu'') for the purpose
of determining antidumping duty liability. We have preliminarily
determined that Mai Shandong is not the successor-in-interest to
Shandong Jinyu for the purpose of determining antidumping duty
liability. Interested parties are invited to comment on these
preliminary results.
EFFECTIVE DATE: June 8, 2010.
FOR FURTHER INFORMATION CONTACT: Raquel Silva, AD/CVD Operations,
Office 8, Import Administration, International Trade Administration,
U.S. Department of Commerce, 1401 Constitution Avenue, NW, Washington,
DC 20230; telephone: 202-482-6475.
SUPPLEMENTARY INFORMATION:
Background
On September 4, 2008, the Department published in the Federal
Register an antidumping duty order on OTR tires from the PRC. See
Certain New Pneumatic Off-the-Road Tires From the People's Republic of
China: Notice of Amended Final Affirmative Determination of Sales at
Less Than Fair Value and Antidumping Duty Order, 73 FR 51624 (September
4, 2008) (``Order''). As part of the Order, Shandong Jinyu received the
separate-rate respondent amended rate of 12.91 percent. Id. at 51627.
On September 14, 2009, Mai Shandong filed a submission requesting that
the Department conduct a changed circumstances review of the Order to
confirm that it is the successor-in-interest to Shandong Jinyu.\1\ In
its submission, Mai Shandong provided the Joint Venture Contract,
Articles of Association and various other documents confirming: 1) an
approximately 90-percent transfer of OTR tire assets from Shandong
Jinyu to Maitech Fin S.r.l. (now known as Mai International); and 2)
the resulting formation of the Mai Shandong joint venture. In addition,
Mai Shandong provided narrative explanation and limited documentation
relating to the management, production facilities and process, customer
base, supplier relationships, distribution and marketing channels and
product mix of both it and the company as it previously operated as
Shandong Jinyu. As part of its September 14, 2009 submission, Mai
Shandong requested that the Department conduct an expedited review.
---------------------------------------------------------------------------
\1\ See Letter from Mai Shandong to the Department regarding
Certain New Pneumatic Off-The-Road Tires from the People's Republic
of China, Request for Changed Circumstances Review (Case No. A-570-
912) (September 14, 2009).
---------------------------------------------------------------------------
In response to the request, the Department initiated a changed
circumstances review of Mai Shandong on November 10, 2009. See Certain
New Pneumatic Off-the-Road Tires from the People's Republic of China:
Initiation of Changed Circumstances Review, 74 FR 57999 (November 10,
2009). However, the Department found conclusive evidence lacking and,
therefore, determined an expedited preliminary result was not
appropriate. Id. at 58001. Subsequent to initiation, the Department
issued, and Mai Shandong responded to, several supplemental
questionnaires requesting additional information.
Scope of the Order
The products covered by the order are new pneumatic tires designed
for off-the-road and off-highway use, subject to exceptions identified
below. Certain OTR tires are generally designed, manufactured and
offered for sale for use on off-road or off-highway surfaces, including
but not limited to, agricultural fields, forests, construction sites,
factory and warehouse interiors, airport tarmacs, ports and harbors,
mines, quarries, gravel yards, and steel mills. The vehicles and
equipment for which certain OTR tires are designed for use include, but
are not limited to: (1) agricultural and forestry vehicles and
equipment, including agricultural tractors,\2\ combine harvesters,\3\
agricultural high clearance sprayers,\4\ industrial tractors,\5\ log-
skidders,\6\ agricultural implements, highway-towed implements,
agricultural logging, and agricultural, industrial, skid-steers/mini-
loaders;\7\ (2) construction vehicles and equipment, including
earthmover articulated dump products, rigid frame haul trucks,\8\ front
end loaders,\9\ dozers,\10\ lift trucks, straddle carriers,\11\
graders,\12\ mobile cranes,\13\ compactors; and (3) industrial vehicles
and equipment, including smooth floor, industrial, mining,
counterbalanced lift trucks, industrial and mining vehicles other than
smooth floor, skid-steers/mini-loaders, and smooth floor off-the-road
counterbalanced lift trucks.\14\ The foregoing list of vehicles and
equipment generally have in common that they are used for hauling,
towing, lifting, and/or loading a wide variety of equipment and
materials in agricultural, construction and industrial settings. Such
vehicles and equipment, and the descriptions contained in the footnotes
are illustrative of the types of vehicles and
[[Page 32377]]
equipment that use certain OTR tires, but are not necessarily all-
inclusive. While the physical characteristics of certain OTR tires will
vary depending on the specific applications and conditions for which
the tires are designed (e.g., tread pattern and depth), all of the
tires within the scope have in common that they are designed for off-
road and off-highway use. Except as discussed below, OTR tires included
in the scope of the order range in size (rim diameter) generally but
not exclusively from 8 inches to 54 inches. The tires may be either
tube-type\15\ or tubeless, radial or non-radial, and intended for sale
either to original equipment manufacturers or the replacement market.
The subject merchandise is currently classifiable under Harmonized
Tariff Schedule of the United States (``HTSUS'') subheadings:
4011.20.10.25, 4011.20.10.35, 4011.20.50.30, 4011.20.50.50,
4011.61.00.00, 4011.62.00.00, 4011.63.00.00, 4011.69.00.00,
4011.92.00.00, 4011.93.40.00, 4011.93.80.00, 4011.94.40.00, and
4011.94.80.00. While HTSUS subheadings are provided for convenience and
customs purposes, our written description of the scope is dispositive.
---------------------------------------------------------------------------
\2\ Agricultural tractors are dual-axle vehicles that typically
are designed to pull farming equipment in the field and that may
have front tires of a different size than the rear tires.
\3\ Combine harvesters are used to harvest crops such as corn or
wheat.
\4\ Agricultural sprayers are used to irrigate agricultural
fields
\5\ Industrial tractors are dual-axle vehicles that typically
are designed to pull industrial equipment and that may have front
tires of a different size than the rear tires.
\6\ A log-skidder has a grappling lift arm that is used to
grasp, lift and move trees that have been cut down to a truck or
trailer for transport to a mill or other destination.
\7\ Skid-steer loaders are four-wheel drive vehicles with the
left-side drive wheels independent of the right-side drive wheels
and lift arms that lie alongside the driver with the major pivot
points behind the driver's shoulders. Skid-steer loaders are used in
agricultural, construction and industrial settings.
\8\ Haul trucks, which may be either rigid frame or articulated
(i.e., able to bend in the middle) are typically used in mines,
quarries and construction sites to haul soil, aggregate, mined ore,
or debris.
\9\ Front loaders have lift arms in front of the vehicle. They
can scrape material from one location to another, carry material in
their buckets, or load material into a truck or trailer.
\10\ A dozer is a large four-wheeled vehicle with a dozer blade
that is used to push large quantities of soil, sand, rubble, etc.,
typically around construction sites. They can also be used to
perform ``rough grading'' in road construction.
\11\ A straddle carrier is a rigid frame, engine-powered machine
that is used to load and offload containers from container vessels
and load them onto (or off of) tractor trailers.
\12\ A grader is a vehicle with a large blade used to create a
flat surface. Graders are typically used to perform ``finish
grading.'' Graders are commonly used in maintenance of unpaved roads
and road construction to prepare the base course on to which asphalt
or other paving material will be laid.
\13\ I.e., ``on-site'' mobile cranes designed for off-highway
use.
\14\ A counterbalanced lift truck is a rigid framed, engine-
powered machine with lift arms that has additional weight
incorporated into the back of the machine to offset or
counterbalance the weight of loads that it lifts so as to prevent
the vehicle from overturning. An example of a counterbalanced lift
truck is a counterbalanced fork lift truck. Counterbalanced lift
trucks may be designed for use on smooth floor surfaces, such as a
factory or warehouse, or other surfaces, such as construction sites,
mines, etc.
\15\ While tube-type tires are subject to the scope of this
proceeding, tubes and flaps are not subject merchandise and
therefore are not covered by the scope of this proceeding,
regardless of the manner in which they are sold (e.g., sold with or
separately from subject merchandise).
---------------------------------------------------------------------------
Specifically excluded from the scope are new pneumatic tires
designed, manufactured and offered for sale primarily for on-highway or
on-road use, including passenger cars, race cars, station wagons, sport
utility vehicles, minivans, mobile homes, motorcycles, bicycles, on-
road or on-highway trailers, light trucks, and trucks and buses. Such
tires generally have in common that the symbol ``DOT'' must appear on
the sidewall, certifying that the tire conforms to applicable motor
vehicle safety standards. Such excluded tires may also have the
following designations that are used by the Tire and Rim Association:
Prefix letter designations:
P - Identifies a tire intended primarily for service on
passenger cars;
LT - Identifies a tire intended primarily for service on
light trucks; and,
ST - Identifies a special tire for trailers in highway
service.
Suffix letter designations:
TR - Identifies a tire for service on trucks, buses, and
other vehicles with rims having specified rim diameter of nominal plus
0.156 or plus 0.250;
MH - Identifies tires for Mobile Homes;
HC - Identifies a heavy duty tire designated for use on
``HC'' 15 tapered rims used on trucks, buses, and other
vehicles. This suffix is intended to differentiate among tires for
light trucks, and other vehicles or other services, which use a similar
designation.
Example: 8R17.5 LT, 8R17.5 HC;
LT - Identifies light truck tires for service on trucks,
buses, trailers, and multipurpose passenger vehicles used in nominal
highway service; and
MC - Identifies tires and rims for motorcycles.
The following types of tires are also excluded from the scope:
pneumatic tires that are not new, including recycled or retreaded tires
and used tires; non-pneumatic tires, including solid rubber tires;
tires of a kind designed for use on aircraft, all-terrain vehicles, and
vehicles for turf, lawn and garden, golf and trailer applications. Also
excluded from the scope are radial and bias tires of a kind designed
for use in mining and construction vehicles and equipment that have a
rim diameter equal to or exceeding 39 inches. Such tires may be
distinguished from other tires of similar size by the number of plies
that the construction and mining tires contain (minimum of 16) and the
weight of such tires (minimum 1500 pounds).
Preliminary Results of the Review
In this changed circumstances review pursuant to section 751(b) of
the Tariff Act of 1930, as amended (the ``Act''), the Department has
conducted a successor-in-interest analysis. In making a successor-in-
interest determination, the Department examines several factors,
including, but not limited to, changes in the following: (1)
management; (2) production facilities; (3) supplier relationships; and
(4) customer base. See, e.g., Notice of Final Results of Changed
Circumstances Antidumping Duty Administrative Review: Polychloroprene
Rubber From Japan, 67 FR 58 (January 2, 2002). While no single factor
or combination of factors will necessarily provide a dispositive
indication of a successor-in-interest relationship, generally, the
Department will consider the new company to be the successor to the
previous company if the new company's resulting operation is not
materially dissimilar to that of its predecessor. See, e.g., Fresh and
Chilled Atlantic Salmon From Norway; Final Results of Changed
Circumstances Antidumping Duty Administrative Review, 64 FR 9979, 9980
(March 1, 1999). Thus, if the record evidence demonstrates that, with
respect to the production and sale of the subject merchandise, the new
company operates as the same business entity as the predecessor
company, the Department may assign the new company the cash deposit
rate of its predecessor.
In accordance with 19 CFR 351.221(c)(3)(i), we preliminarily
determine that Mai Shandong, formed by an approximately 90-10 ownership
joint venture of Mai International and Shandong Jinyu, respectively, is
not the successor-in-interest to Shandong Jinyu. While the record
evidence indicates that Mai Shandong retained identical production
facilities, distribution channels and similar suppliers to Shandong
Jinyu, it also indicates that Mai Shandong's ownership, management
composition, corporate structure and sales/marketing operations changed
significantly from that of Shandong Jinyu. The remaining business
characteristics (e.g., production process) changed moderately, but not
sufficiently to warrant elaboration.
While Mai Shandong claims that the majority of its personnel
transferred from Shandong Jinyu, none of Shandong Jinyu's executive-
level managers remain in Mai Shandong. Furthermore, Mai Shandong is now
governed by a Board of Directors, in which Mai Shandong's new Italian
parent company retains two-thirds control overall of Mai Shandong's
major operational decisions.
With respect to corporate and operational structure, the new entity
no longer has its own independent human resources, raw material
processing, corporate-level research and development or sales
capabilities. Shandong Jinyu conducted those business functions for
itself whereas Mai Shandong depends on its parent companies for each of
those functions. For further information, please see Memorandum from
Raquel Silva, Analyst, regarding ``Analysis Memo for Preliminary
Results of Antidumping Duty Changed Circumstances Review of New
Pneumatic Off-the-Road Tires from the People's Republic of China,''
dated concurrently with the signature date of this notice
(``Preliminary Results Analysis Memo'').
Finally, Mai Shandong's sales and marketing operations are now
highly dependent upon its Italian parent. Mai Shandong retains an
employee partially dedicated to sales activities; the employee plays a
supportive, but not leading role. It also routes all sales
[[Page 32378]]
through Mai International, selling no product directly to customers as
Shandong Jinyu had done. Additionally, Mai Shandong has not sold any
product to any of Shandong Jinyu's former U.S. customers. The evidence
on the record also shows a significant change in customer base. For
further information, please see the Preliminary Results Analysis Memo.
Therefore, we preliminarily find that the record evidence does not
support Mai Shandong's claim that it is the successor-in-interest to
Shandong Jinyu. Mai International's acquisition of approximately 90
percent equity in Shandong Jinyu's OTR tires business resulted in a
joint venture that is majority owned and operated by a new, foreign
entity, with a new corporate structure, changed management, and
significantly altered sales and marketing operations. Therefore, given
the totality of the considered factors, the record evidence
demonstrates that Mai Shandong is a new entity that operates in a
significantly different manner from Shandong Jinyu. Consequently, we
preliminarily determine that Mai Shandong should not be given the same
antidumping duty treatment as Shandong Jinyu, i.e., the separate rate
status previously afforded to Shandong Jinyu and the accompanying 12.91
percent antidumping duty cash deposit rate. Instead, Mai Shandong, as a
new entity, should continue to be treated as part of the PRC-entity
until such time as it demonstrates that it meets the separate rates
criteria established by the Department and assigned, as its cash
deposit rate, the ``PRC-wide entity'' rate, which in this proceeding is
210.48 percent.
The cash deposit determination from this changed circumstances
review will apply to all entries of the subject merchandise entered or
withdrawn from warehouse, for consumption on or after the date of
publication of the final results of this changed circumstances review.
See Granular Polytetrafluoroethylene Resin from Italy: Final Results of
Changed Circumstances Review, 68 FR 25327 (May 12, 2003). This deposit
rate shall remain in effect until further notice.
Public Comment
Any interested party may request a hearing within 10 days of
publication of this notice in accordance with 19 CFR 351.310(c).
Interested parties may submit case briefs no later than 14 days after
the date of publication of this notice, in accordance with 19 CFR
351.309(c)(1)(ii). Rebuttal briefs, limited to issues raised in the
case briefs, may be filed no later than five days after the case
briefs, in accordance with 19 CFR 351.309(d)(1). Hearing requests
should contain the following information: (1) the party's name,
address, and telephone number; (2) the number of participants; and (3)
a list of the issues to be discussed. Oral presentations will be
limited to issues raised in the briefs. If a request for a hearing is
made, parties will be notified of the time and date for the hearing to
be held at the U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW, Washington, DC 20230. See 19 CFR 351.310(d).
The Department will issue its final results of review within 270 days
after the date on which the changed circumstances review was initiated,
in accordance with 19 CFR 351.216(e), and will publish these results in
the Federal Register.
This notice is published in accordance with sections 751(b)(1) and
777(i) of the Act and 19 CFR 351.216 of the Department's regulations.
Dated: June 1, 2010.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 2010-13759 Filed 6-7-10; 8:45 am]
BILLING CODE 3510-DS-S